Welcome back. David Petraeus, the retired U.S. Army general and former CIA director who now chairs KKR's Middle East operations, said at an Economic Club of New York event yesterday that the fight in Iran is a "catalytic moment" in defining the future of war—one dominated by autonomous systems. For private-equity firms and their portfolio companies, the U.S. government’s push to increase weapons production and technology development stands to generate new opportunities.

In this morning's newsletter, Isaac Taylor scoops that HighVista is planting a flag in the booming secondary market, hiring ex-Kline Hill managing director Raudel Yanez to lead a dedicated secondary strategy.

And Journal colleague Peter Rudegeair reports that a Stone Ridge fund holding consumer and small-business loans made by companies such as Affirm and Block told clients last week that recent redemption requests were so high that it would honor only 11% of the amount investors wanted back.

We have these and more. Read on…

HighVista Strategies is the latest firm to plant its flag in the private-equity secondary market, creating a new dedicated strategy that will focus on such transactions, Isaac Taylor writes for WSJ Pro. The Boston-based firm has hired secondary expert Raudel Yanez as a managing director and head of secondaries to lead the newly formed strategy. He joins the firm from Kline Hill Partners, where he was a managing director and focused on continuation vehicles. Yanez is the first direct hire HighVista has made for the secondary team, but the firm plans to expand the team over time.

Stone Ridge Asset Management has joined other nonbank private lenders in limiting investor withdrawals from an investment fund, Peter Rudegeair reports for the Journal. The fund holds consumer and small-business loans made by companies including Affirm and Block, so the withdrawal requests suggest a broadening of the stress in the private-credit market. Last week, the firm told investors in its Stone Ridge Alternative Lending Risk Premium Fund that recent redemption requests were so high that it would honor only 11% of the amount investors wanted back, according to an investor update viewed by the Journal.

As more women rise through the industry ranks, they shape not only the cultures of their own firms, but also the industry itself. Join us for a conversation with some of our past and present Women to Watch honorees, as we discuss issues female professionals face building their careers, as well as some of the emerging themes that stand to shape dealmaking as the year unfolds. Register here to join the webinar at 1 p.m. ET March 26.

Buyout firm KKR & Co. agreed to commit up to $310 million to a strategic partnership with Allfleet India and parent PMI Electro Mobility to support the development of an electric bus platform, Megan Cheah reports for Dow Jones Newswires. The deal marks the first investment in India by KKR’s global climate transition strategy. KKR will take a majority stake in Allfleet and a minority stake in PMI Electro. Allfleet develops, owns and operates electric public transport fleets and is on course to deploy more than 5,000 e-buses.

Technology investor DFJ Growth and Northzone Management led a $120 million investment in cybersecurity company Xbow at a valuation of more than $1 billion. Other participants included new investors Sofina and Alkeon Capital. The Seattle company specializes in developing software used to test networks and computer systems to identify vulnerabilities.

Swedish buyout firms EQT AB and SEB Private Equity are part of a group backing Stockholm-based electric ferry maker Candela with a €30 million, or $34.6 million, growth investment, joined by the California Public Employees' Retirement System and others, Dominic Chopping reports for the Journal. The company's ships use hydrofoils to lift their hulls out of the water and reduce drag, saving energy. Its P-12 model has a range of around 40 nautical miles and can carry up to 30 passengers.

Warburg Pincus is acquiring a majority stake in TheGuarantors, a provider of AI-driven underwriting for the rental housing market, which currently supports a footprint of more than 3.5 million rental units. The company had previously raised capital from venture firms that include Portage Ventures, Kensington Capital Partners and White Star Capital.

Recently formed specialist investor ETNA has struck its first deal, buying a majority stake in Brolis Defence Group, a developer of electro-optical sensing technology for defense and security applications, Sebastian McCarthy reports for sister publication Private Equity News. Set up last year and armed with capital from Danish pensions, the buyout shop includes Florian Funk, a Munich-based former EQT AB partner, Frederik Busch, a former CataCap partner, and Wolff van Sintern, previously a senior partner at McKinsey & Co.

European private-equity firm ICG is backing railway maintenance services provider Comcreta Group, investing through its ICG European Infrastructure strategy.

Bain Capital is investing in venting and climate-control systems provider Duravent Group, backing the company through its special situations strategy.

Our add-on deal interactive tool allows you to sort and analyze volumes of add-on deal data compiled by WSJ Pro. View more.

Blackstone's sale of a majority stake in pollution-control company Desotec to EQT AB in Stockholm received antitrust clearance from European regulators, Dow Jones Newswires reported. The deal calls for Blackstone to remain as a minority investor in the Belgian company, which offers mobile units that filter pollutants from air and water. Blackstone initially acquired its majority stake in Desotec from EQT in 2021. 

Healthcare-focused QHP Capital in Raleigh, N.C., has wrapped up a single-asset continuation fund to support its investment in Azurity Pharmaceuticals with about $1.1 billion after providing cash-out options to prior fund investors. HarbourVest Partners led participants in the new vehicle, joined by Pantheon Ventures and Audax Group. QHP first invested in Azurity in 2018, according to the firm's website. 

Lone Star Funds in Dallas has closed on more than $1 billion for a credit fund targeting investments in home loans originated by other lenders. The firm's Lone Star Residential Mortgage Fund IV has the capacity to back more than $10 billion in loans, once anticipated leverage is included. About a third of the new fund's capital has already been committed.

Healthcare technology-focused firm Kain Capital has added Sameer Mathur as a partner and Bridie Gahan as a vice president of strategy. Mathur was most recently a partner at Chicago Pacific Founders, while Gahan held a leadership role with healthcare technology company Astrana Health.

Healthcare-focused secondary firm Revelation Partners has added Jonathan Au as a partner and Jordan Bloom as an associate at the firm. Au joins from CVC Secondary Partners, where he was a managing director, and Bloom previously worked as an associate on the secondary team at Carlyle’s AlpInvest unit.

Multi-strategy investment firm Star Mountain Capital has added George Zahringer as a strategic portfolio partner focusing on value-creation planning among its lower midmarket holdings. He joins from AZ Private Ventures, where he was a co-founder and principal.

Behrman Capital has appointed Eric Smith as an operating partner at the New York-based midmarket firm. Smith previously served as chief executive at former Behrman portfolio company BECO Holding Company, which distributes industrial fire protection equipment.

Advent International in Boston is setting up a Hong Kong office and tapped Xiaoni Shi, managing director and head of investor relations for Asia Pacific, to lead the new operation. Advent's greater China investment business remains under Andrew Li, managing director and head of greater China.

Investment bank Equita Group in Milan is acquiring Xenon Private Equity, a buyout firm with assets of about €1 billion, for €70 million, or around $80.8 million. The deal will double the Milan-listed acquirer's assets.

Around 29% of assets held by business development companies and interval funds consist of loans to software companies and related businesses, such as information technology services and healthcare tech, according to an S&P Global Ratings report. About 20% of their assets are in more narrowly defined software company loans, S&P said, citing its analysis of more than 165 BDCs and interval funds at the end of September. S&P said the bets have remained largely stable over the past three years.

Barclays should record a materially lower impairment than the £500 million—roughly $665 million—it is owed by collapsed U.K. mortgage lender Market Financial Solutions, Chief Executive C.S. Venkatakrishnan said Wednesday, and downplayed the risks to banks from any private-credit meltdown, Margot Patrick reports for the Journal. The British bank has put its private-credit lending at around £20 billion, defining it as lending outside of banks or public-debt markets.

Courts in the U.K. and Dubai have issued asset-freeze orders targeting Paresh Raja, the former head of failed mortgage lender Market Financial Solutions in London, a representative of company administrator AlixPartners confirmed in a statement Wednesday. Raja ran the company as chief executive before its collapse last month, intensifying scrutiny of the private-credit industry as firms including Apollo Global Management and Barclays had supplied financing to the company. MFS creditors are owed at least £1.3 billion, or $1.74 billion, Bloomberg News reported.

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Maria Armental; Ted Bunker; Chris Cumming; Luis Garcia; Laura Kreutzer; Isaac Taylor; Chitra Vemuri.